Mission Grey Daily Brief - July 31, 2024
Summary of the Global Situation for Businesses and Investors
The world is witnessing a series of critical events that have significant implications for the global geopolitical landscape. From the US presidential race and its impact on foreign policy to violent protests in Bangladesh and the visit of India's Prime Minister to Ukraine, these developments are shaping international relations and creating new challenges and opportunities for businesses and investors. As always, Mission Grey is committed to providing insightful analysis to help our clients navigate these complex dynamics and make informed decisions.
US Presidential Race and Foreign Policy
The US presidential election is taking an unexpected turn with President Joe Biden's decision to drop out, following an assassination attempt on former President Donald Trump. Vice President Kamala Harris has emerged as the likely Democratic nominee, facing Trump and independent candidate Robert F. Kennedy Jr. Harris emphasizes diplomacy and multilateral engagement, while Trump's "America First" agenda prioritizes domestic issues and minimal foreign intervention. Kennedy promises a shift towards human rights and democracy. The outcome will have repercussions for global conflicts, especially in the South Caucasus region, where Armenia's security is at stake.
Turmoil in Bangladesh
Bangladesh is facing violent protests over a controversial court ruling on job quotas, resulting in the deaths of over 200 people and the arrest of 9,000. The international community has condemned the excessive force used, with the UN and human rights organizations urging the government to respect peaceful assembly. This crisis has also exposed the increasingly authoritarian tendencies of Prime Minister Sheikh Hasina's government, which has been in power for 15 years. The situation is of particular concern to neighboring India due to the shared border and the potential for unrest to spread, impacting regional stability.
Modi's Visit to Ukraine
Indian Prime Minister Narendra Modi's upcoming visit to Ukraine is a significant geopolitical move. It comes after Modi's meeting with Russian President Vladimir Putin and underscores India's growing geopolitical influence. This visit presents an opportunity for India to leverage its position and mediate the Ukraine-Russia conflict. However, Modi's embrace of Putin has been criticized by Ukrainian President Volodomyr Zelensky, complicating India's relations with Ukraine.
Vietnam-EU Relations
The European Union's foreign policy chief, Josep Borrell, offered Vietnam security support in the South China Sea, where Vietnam and China have conflicting boundary claims. The EU has a "direct interest" in maintaining peace in this crucial shipping waterway. Borrell proposed enhancing Vietnam's maritime security and cybersecurity capabilities. This development is part of Vietnam's efforts to diversify its security equipment sources and reduce its reliance on Russian military gear.
Risks and Opportunities
- US Presidential Election - The outcome of the US election will impact foreign policy, particularly in the South Caucasus region. A Trump victory may signal reduced US involvement in international conflicts, while a Harris administration could provide more robust diplomatic support. Kennedy's potential win introduces an unpredictable element, possibly increasing pressure on authoritarian regimes.
- Turmoil in Bangladesh - The ongoing crisis in Bangladesh poses risks to regional stability, especially for neighboring India. Businesses should monitor the situation and assess the potential impact on their operations, supply chains, and investments in the region.
- Modi's Visit to Ukraine - India's role in mediating the Ukraine-Russia conflict presents opportunities for businesses to explore new avenues for cooperation and influence regional stability. However, the delicate balance of India's relations with Russia and Ukraine should be carefully navigated.
- Vietnam-EU Relations - Vietnam's enhanced security capabilities through EU support may create opportunities for businesses in the maritime and cybersecurity sectors.
Further Reading:
Beyond borders: Armenia’s crossroads in the US election - Armenian Weekly
Donald Trump v Kamala Harris: what the polls say - The Economist
EU's Borrell Offers Vietnam Security Support on South China Sea - U.S. News & World Report
Haiti prime minister escapes unharmed after shots fired by gangs - Arab News
Themes around the World:
Geopolitical Tensions and Trade Risks
Ongoing geopolitical conflicts, including the US-Ukraine war and US-China trade tensions, create volatility in global markets. US secret diplomatic efforts to end the Ukraine war and trade restrictions on AI chip exports to China impact supply chains, investment risk assessments, and currency markets, necessitating vigilant geopolitical risk management for businesses.
China's Economic Growth Challenges
China faces growth headwinds post-truce, with weakening manufacturing PMI, declining export orders, and margin pressures. Domestic consumption struggles amid labor market uncertainties, while policy stimulus is anticipated. These dynamics affect investor sentiment and global supply chains, necessitating cautious investment and operational planning in China.
Export Climate and Trade Performance
Turkey's manufacturing export climate reached a 1.5-year high in October 2025, reflecting improved demand from key markets like Germany, the US, and Italy. Exports hit record levels despite global uncertainties, supported by resilient external demand and diversified trade partners. However, imports and the trade deficit have widened, underscoring challenges in balancing trade dynamics amid growth ambitions.
Ukrainian-American Business Contributions
Ukrainian-American enterprises generate nearly $60 billion annually and support approximately 300,000 US jobs, particularly in technology sectors like AI and cloud computing. This diaspora-driven economic activity strengthens bilateral economic ties, fosters innovation, and provides indirect support to Ukraine’s economy through sustained business linkages.
Expanding Capital Market Participation
The Indonesian capital market reached over 19 million investors by October 2025, with a 58.4% increase in new investors compared to 2024. Growth is driven by younger demographics and extensive financial literacy initiatives by IDX. This broadening investor base enhances market depth, liquidity, and resilience, supporting long-term capital market development and inclusive economic growth.
Geopolitical Tensions and Trade Risks
Heightened geopolitical instability, including US-China rivalry and regional conflicts, is driving trade uncertainties and supply chain fragility. Australia's strategic alignment with the US through AUKUS and its complex relationship with China create diplomatic and economic challenges, influencing investment flows and regional security dynamics.
US Labor Market Volatility and Job Cuts
2025 saw a sharp 55% rise in US job dismissals, with nearly one million jobs cut, including significant AI-related layoffs. The prolonged shutdown exacerbated labor market uncertainty, particularly affecting young graduates. These trends impact consumer spending, wage growth, and operational costs, influencing corporate strategies and investment decisions amid a cautious economic outlook.
Macroeconomic Stability and Inflation Trends
Egypt's Central Bank projects inflation to decline from 28.3% in 2024 to 10.5% in 2026, aiming for a 7% target by late 2026. This disinflation supports economic recovery, with GDP growth forecasted at 4.8% in 2025/26 and 5.1% in 2026/27. Stable inflation and growth enhance investor confidence and improve conditions for trade and investment.
Rare Earth Minerals as Strategic Assets
Brazil holds approximately 25% of global rare earth reserves, positioning it as a critical alternative to China’s dominance. While commercial production is nascent, the U.S. and allies view Brazil as a key supplier for essential minerals used in high-tech industries. This potential reshapes geopolitical negotiations and investment priorities, though environmental and infrastructural challenges remain significant.
Financial Market Reactions and Investor Sentiment
London's stock market, particularly financial and industrial sectors, has faced declines amid global caution and domestic uncertainties. Investor sentiment is sensitive to fiscal policy signals and economic data, affecting equity valuations and capital market conditions, which in turn influence corporate financing and investment decisions.
Vision 2030 Economic Transformation
Saudi Arabia's Vision 2030 is a comprehensive economic reform plan aimed at diversifying the economy beyond oil, increasing private sector participation, and boosting sectors like tourism, technology, and manufacturing. Its success is critical for attracting foreign investment and sustaining long-term growth, but regional instability and project delays pose risks to its realization.
Agriculture Market Expansion and Modernization
Egypt's agriculture sector, valued at $43 billion, is expanding through irrigation modernization, land reclamation, and adoption of climate-smart farming. Investments in agri-tech, mechanization, and export certification enhance productivity and market access, supporting rural livelihoods and export diversification across Middle East, Africa, and Europe.
Geopolitical Risks Driving Gold Prices
Global geopolitical and geoeconomic uncertainties have fueled a surge in gold prices, with Indonesia's gold sales rising 20% year-on-year. Gold's role as a safe-haven asset is influencing inflation and investment behavior domestically, affecting consumer spending and monetary policy considerations.
US-China Geopolitical Easing Boosts Markets
Easing geopolitical tensions between the US and China are improving global risk appetite, supporting a rebound in Thailand's equity market. This environment encourages investment inflows, benefiting consumption-linked sectors, infrastructure, and technology stocks, thereby enhancing Thailand's attractiveness for international investors and stabilizing supply chains dependent on regional trade dynamics.
Financial Stability and Currency Controls
In response to the invasion, Ukraine's central bank imposed strict limits on cash withdrawals and foreign exchange transactions to stabilize the hryvnia and prevent capital flight. These controls, while necessary, restrict liquidity and complicate cross-border trade and investment, posing operational challenges for businesses and foreign investors.
Economic Recovery Amid Market Volatility
Pakistan's stock market has surged approximately 40% in 2025, driven by retail investor enthusiasm and improved macroeconomic indicators, including IMF-backed reforms and credit rating upgrades. However, this rally coexists with significant volatility, foreign investor pullback, and political instability, underscoring a fragile recovery that poses risks to sustained investor confidence and market stability.
Systemic Corruption and Governance Challenges
The IMF's comprehensive report highlights entrenched corruption across Pakistan's institutions, including judiciary, police, and state-owned enterprises. Elite capture distorts markets and impedes fair competition, undermining investor trust and economic growth. Governance reforms are critical to unlocking GDP growth potential and reducing dependence on external bailouts, but political resistance and lack of transparency remain major obstacles.
Profit Warnings Reflect Business Uncertainty
UK-listed companies, especially in Yorkshire and the Midlands, report fewer but still significant profit warnings, driven by weaker consumer confidence, geopolitical uncertainty, contract delays, and tariff impacts. This signals ongoing operational challenges and margin pressures across sectors like construction, industrials, and retail, affecting investment and supply chain decisions.
Tariff Anxiety and Corporate Uncertainty
US CFOs report that policy volatility, including tariffs and regulatory unpredictability, imposes a significant revenue drag—estimated at 6% annually. This uncertainty undermines pricing power, disrupts supply chains, and complicates capital investment, particularly for firms with substantial global exposure.
Credit Rating and Fiscal Discipline
S&P Global Ratings affirmed Thailand's BBB+ credit rating with a stable outlook, reflecting confidence in the government's transparent economic policies and fiscal discipline. Strategic investments in infrastructure and the Eastern Economic Corridor, coupled with strong external financial fundamentals, support economic resilience despite domestic political uncertainties and a downgraded outlook from other agencies.
Strategic US-Thailand Partnerships and Trade Talks
Thailand maintains strategic trade and rare-earth mineral cooperation with the US, balancing economic and security interests. Despite unresolved technicalities in trade agreements, ongoing US-Thailand trade negotiations remain on track, underscoring Thailand's role as a vital production hub and stable economic partner in the Indo-Pacific region.
US Government Shutdown Economic Impact
The 2025 US federal government shutdown, the longest in history at 43 days, furloughed 900,000 workers and disrupted economic activity. While direct GDP impact is moderate relative to global scale, shutdowns create uncertainty affecting markets, data flow, and investor sentiment, influencing global asset prices, currency valuations, and risk appetite.
EU Integration and Reform Challenges
Ukraine's EU accession process shows progress but is hindered by persistent issues in anti-corruption enforcement, judicial independence, and public sector transparency. Delays and political resistance to reforms risk slowing integration, affecting investor confidence and access to EU markets and financial support.
International Perception of French Corporations
French multinational corporations maintain a generally positive image internationally, supported by strong ESG practices and strategic communication. Companies like Renault, Airbus, and Stellantis lead in media influence, enhancing France's soft power and attractiveness for foreign investment despite domestic political challenges, thereby supporting France's global economic positioning.
Credit Rating Stabilization
S&P upgraded Israel's credit outlook from negative to stable, reflecting economic resilience and reduced geopolitical risks. This improvement enhances investor confidence, lowers borrowing costs, and supports fiscal stability, positively influencing foreign investment and sovereign debt management.
Sustained Economic Growth and Export Expansion
Indonesia's economy grew 5.04% in Q3 2025, supported by domestic activities and foreign demand. Export values reached US$209.8 billion by September, an 8.14% increase driven mainly by non-oil and gas sectors, including manufacturing and agriculture. This export diversification strengthens trade resilience and underpins economic stability, attracting foreign investment and enhancing supply chain integration.
Inflationary Pressures and Fuel Price Impact
Rising fuel prices have triggered a fresh inflation surge, with headline inflation reaching 6.2% year-on-year in October 2025. Inflationary pressures permeate food, electricity, and transport costs, eroding household purchasing power and increasing business input costs. Persistent inflation challenges monetary policy effectiveness and threatens economic stability, complicating business operations and consumer demand.
Growing Role of Indian Businesses
India is a key trade and investment partner for Saudi Arabia, with bilateral trade exceeding $40 billion. Saudi reforms and investment opportunities in energy, technology, and infrastructure are attracting Indian companies and workers, strengthening economic ties and influencing energy security and job markets in both countries.
Legal and Political Pressure from China
China is intensifying cross-border political repression targeting Taiwanese lawmakers and public figures, aiming to undermine Taiwan's democratic institutions and intimidate its political actors. This campaign threatens Taiwan's internal stability and challenges the broader international rules-based order, complicating diplomatic relations and domestic governance.
Rising Credit and Liquidity Risks for Corporates
Brazilian companies face increasing credit risks linked to rapid growth in private credit funds, which may have weaker governance and liquidity compared to traditional lenders. Recent credit market disruptions have elevated borrowing costs and curtailed corporate debt issuance, complicating financing strategies and potentially dampening investment and expansion plans.
US-China Trade Tensions and Strategic Competition
US-China trade relations remain a critical fracture point affecting global markets. Despite economic interdependence, security concerns and tariff policies create ongoing uncertainty. Chinese state-backed financing into US strategic sectors raises national security alarms, complicating investment and supply chain decisions. Businesses must navigate this duality carefully, balancing market access with regulatory and geopolitical risks.
Foreign Direct Investment Surge
Saudi Arabia is experiencing a surge in foreign direct investment, notably from UAE and Indian companies, driven by economic stability, growth prospects, and Vision 2030 reforms. International firms are increasingly using private equity, venture capital, and joint ventures to enter Saudi markets, focusing on technology, finance, and infrastructure, which strengthens bilateral trade ties and regional economic integration.
Manufacturing Sector Crisis
Approximately 8% of German companies, especially in manufacturing, face critical financial distress amid ongoing recessionary pressures. High energy costs, supply chain disruptions, and weak global demand have led to a 12% output decline since early 2023. The sector's contraction threatens jobs and export competitiveness, necessitating urgent structural reforms to restore industrial vitality.
Crypto Regulation and Enforcement
Turkish authorities have seized a major crypto asset company amid money laundering investigations involving nearly $770 million. This crackdown reflects increased regulatory scrutiny in Turkey's large cryptocurrency market, impacting fintech innovation, compliance requirements, and reputational risks for crypto-related businesses.
India's Economic Resilience Amid Global Uncertainty
India demonstrates robust economic resilience despite global policy uncertainty and slowing growth in advanced economies. Supported by strong domestic fundamentals, strategic trade diversification, and prudent monetary policy, India sustains growth momentum with a 4.0% IIP in September 2025 and easing inflation, positioning itself as a fast-growing major economy in a volatile global landscape.
Foreign Investor Capital Outflows
Foreign investors withdrew Rp3.79 trillion (US$254 million) from Indonesian markets in November 2025, primarily from government bonds and Bank Indonesia securities. Despite short-term outflows, domestic trading activity surged, reflecting robust local investor engagement. Persistent foreign net selling since early 2025 signals cautious external sentiment, impacting liquidity and investment strategies in Indonesia's financial markets.